Kim Sang-hoon "Short-term Housing Trading Profits Surpass 2 Trillion Won Since Moon Administration Inauguration"

Minister of Land, Infrastructure and Transport Kim Hyun-mi is answering reporters' questions after announcing a comprehensive real estate plan, including strengthening the comprehensive real estate holding tax for multi-homeowners, at the Government Seoul Office in Jongno-gu, Seoul on the 10th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Lee Ji-eun] Kim Sang-hoon, a member of the Future United Party, announced on the 12th that "since the inauguration of the Moon Jae-in administration, the profit from short-term housing transactions has exceeded 2 trillion won per year."

According to the status of capital gains by housing holding period from 2015 to 2018, submitted by the National Tax Service on the same day, Kim stated that the capital gains from so-called 'short-term' transactions, where the housing holding period is less than 2 years, reached 2.182 trillion won in 2018, with 58,310 cases.

Short-term capital gains were 1.5059 trillion won in 2015 but continuously increased after the Moon administration took office, reaching 1.914 trillion won in 2017 and exceeding 2 trillion won in 2018. Although the number of short-term transactions decreased from 70,316 cases in 2015 to 58,310 cases in 2018, the average profit per transaction rose 1.7 times from 21 million won to 37 million won.

In particular, for houses priced over 900 million won, short-term profits increased significantly from 310 million won per case in 2015 to 540 million won per case in 2018. Short-term profits for general houses priced under 900 million won also rose from 21 million won to 33 million won during the same period. Kim said, "Although they declared they would crack down severely on short-term trading as speculation, the scale has rather grown," adding, "While transactions have shrunk due to capital gains tax reforms, profits have increased due to rising real estate prices."

Kim also stated, "The Moon administration pledged to curb unearned income in the housing market, but it has brought about the opposite result," and expressed concern that "the July 10 measures aimed at curbing short-term trading might amplify such side effects."